Costing Support for EV Battery Manufacturing

Communications

Quotes

• To increase transparency around these announcements, we are providing an estimate of the total cost of government support for EV battery manufacturing—including both announced and non-announced costs.

• We estimate the total cost of government support for EV battery manufacturing by Northvolt, Volkswagen and Stellantis-LGES to be $43.6 billion over 2022-23 to 2032-33, which is $5.8 billion higher than the $37.7 billion in announced costs.

• Based on Northvolt’s projected annual production schedule, we estimate a break-even timeline of 11 years for the $4.6 billion production subsidy.

• We estimate a break-even timeline of 15 years for the $13.2 billion production subsidy announced for Volkswagen, and 23 years for the $15.0 billion in production subsidies announced for Stellantis-LGES—consistent with our previous estimate of 20 years based on their combined production schedules.

News Release

{"id":58,"created_at":"2023-11-16T15:28:30-05:00","updated_at":"2023-11-17T08:57:03-05:00","slug":"pbo-estimates-government-support-for-ev-battery-manufacturing-to-cost-436-billion-le-dpb-estime-a-436-milliards-de-dollars-le-cout-du-soutien-accorde-par-le-gouvernement-pour-la-fabrication-de-batteries-de-ve","title_en":"PBO estimates government support for EV battery manufacturing to cost $43.6 billion","title_fr":"Le DPB estime \u00e0 43,6 milliards de dollars le co\u00fbt du soutien accord\u00e9 par le gouvernement pour la fabrication de batteries de VE","body_en":"The Parliamentary Budget Officer (PBO) today released his analysis of the cost of government support for electric vehicle (EV) battery manufacturing announced to date that will be provided to Northvolt, Volkswagen and Stellantis-LGES. The report also provides estimates of the break-even timelines for the announced production subsidies.\n\nTo date, government announcements of financial support for EV battery manufacturing have largely been made in isolation and an estimate of the total cost of government support has not been publicly provided. \u201cTo increase transparency around these announcements, we are providing an estimate of the total cost of government support for EV battery manufacturing\u2014including both announced and non-announced costs,\u201d says PBO Yves Giroux.\n\n\u201cWe estimate the total cost of government support for EV battery manufacturing by Northvolt, Volkswagen and Stellantis-LGES to be $43.6 billion over 2022-23 to 2032-33, which is $5.8 billion higher than the $37.7 billion in announced costs,\u201d adds Mr. Giroux. The $5.8 billion in non-announced costs represents foregone corporate income tax revenues for the federal, Ontario and Quebec governments combined.\n\nOf the $43.6 billion in total cost, PBO estimates that $26.9 billion (62 per cent) in costs will be incurred by the federal government and $16.7 billion (38 per cent) will fall on the provincial governments of Ontario and Quebec. PBO\u2019s estimate of the total cost is conditional on the U.S. Advanced Manufacturing Production Credit. (AMPC) remaining in place (until the end of 2032) and on the EV battery production schedules provided by Northvolt, Volkswagen and Stellantis-LGES being realized.\n\nIn its break-even analysis, the report notes that the federal government used PBO\u2019s methodology to estimate a break-even timeline of 9 years for Northvolt\u2019s production subsidy, based on full production in every year. \u201cBased on Northvolt\u2019s projected annual production schedule, we estimate a break-even timeline of 11 years for the $4.6 billion production subsidy,\u201d says Mr. Giroux.\n\n\u201cWe estimate a break-even timeline of 15 years for the $13.2 billion production subsidy announced for Volkswagen, and 23 years for the $15.0 billion in production subsidies announced for Stellantis-LGES\u2014consistent with our previous estimate of 20 years based on their combined production schedules,\u201d adds Mr. Giroux.","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui son analyse du co\u00fbt du soutien accord\u00e9 par le gouvernement pour la fabrication de batteries de v\u00e9hicules \u00e9lectriques (VE) annonc\u00e9e \u00e0 ce jour pour Northvolt, Volkswagen et Stellantis-LGES. Ce rapport du DBP comporte \u00e9galement une estimation des seuils de rentabilit\u00e9 des subventions \u00e0 la production annonc\u00e9es.\n\n\u00c0 ce jour, les annonces d\u2019aide financi\u00e8re du gouvernement pour la fabrication de batteries de VE ont \u00e9t\u00e9 faites, pour la plupart, de fa\u00e7on isol\u00e9e. Aucune estimation du co\u00fbt total de l\u2019aide accord\u00e9e n\u2019a \u00e9t\u00e9 rendue publique. \u00ab Afin de faire preuve de davantage de transparence par rapport \u00e0 ces annonces, nous fournissons une estimation du co\u00fbt total de l\u2019aide gouvernementale accord\u00e9e pour la fabrication de batteries de VE, y compris les co\u00fbts annonc\u00e9s et non annonc\u00e9s \u00bb, a d\u00e9clar\u00e9 le DPB, Yves Giroux.\n\n\u00ab Nous estimons que le co\u00fbt total de l\u2019aide gouvernementale accord\u00e9e \u00e0 Northvolt, \u00e0 Volkswagen et \u00e0 Stellantis-LGES pour la fabrication de batteries de VE s\u2019\u00e9l\u00e8vera \u00e0 43,6 milliards de dollars au cours de la p\u00e9riode de 2022-2023 \u00e0 2032-2033, ce qui repr\u00e9sentera une augmentation de 5,8 milliards de dollars par rapport aux co\u00fbts annonc\u00e9s de 37,7 milliards de dollars \u00bb, a-t-il ajout\u00e9. Ces co\u00fbts non annonc\u00e9s de 5,8 milliards de dollars repr\u00e9sentent la perte de recettes fiscales pour les gouvernements f\u00e9d\u00e9ral, ontarien et qu\u00e9b\u00e9cois combin\u00e9s.\n\nDes co\u00fbts totaux de 43,6 milliards de dollars, le DPB estime que 26,9 milliards de dollars (62 %) des co\u00fbts seront assum\u00e9s par le gouvernement f\u00e9d\u00e9ral, alors que 16,7 milliards de dollars (38 %) rel\u00e8veront des gouvernements provinciaux de l\u2019Ontario et du Qu\u00e9bec. L\u2019estimation du co\u00fbt total par le DPB est subordonn\u00e9e au maintien du cr\u00e9dit pour la production manufacturi\u00e8re de pointe (AMPC) des \u00c9tats-Unis (jusqu\u2019\u00e0 la fin de 2032) et \u00e0 la r\u00e9alisation des calendriers de production de batteries de VE fournis par Northvolt, Volkswagen et Stellantis-LGES.\n\nEn outre, le rapport indique que le gouvernement f\u00e9d\u00e9ral, utilisant la m\u00e9thodologie du DPB, a estim\u00e9 que le seuil de rentabilit\u00e9 atteindrait neuf ans pour la subvention \u00e0 la production accord\u00e9e \u00e0 Northvolt. Or, \u00ab selon le calendrier de production annuel projet\u00e9 de Northvolt, nous estimons \u00e0 11 ans le seuil de rentabilit\u00e9 de la subvention \u00e0 la production de 4,6 milliards de dollars \u00bb, a pr\u00e9cis\u00e9 M. Giroux.\n\n\u00ab Nous estimons par ailleurs que le seuil de rentabilit\u00e9 de la subvention \u00e0 la production de 13,2 milliards de dollars annonc\u00e9e pour Volkswagen serait atteint en 15 ans, et en 23 ans pour la subvention \u00e0 la production de 15 milliards accord\u00e9e pour Stellantis-LGES. Ces chiffres sont coh\u00e9rents avec notre estimation pr\u00e9c\u00e9dente (de 20 ans) qui \u00e9tait bas\u00e9e sur les calendriers de production combin\u00e9s de ces entreprises \u00bb.","release_date":"2023-11-17T09:00:00-05:00","is_published":"2023-11-17T08:57:03-05:00","internal_id":"COM-2324-058","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/pbo-estimates-government-support-for-ev-battery-manufacturing-to-cost-436-billion-le-dpb-estime-a-436-milliards-de-dollars-le-cout-du-soutien-accorde-par-le-gouvernement-pour-la-fabrication-de-batteries-de-ve"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/pbo-estimates-government-support-for-ev-battery-manufacturing-to-cost-436-billion-le-dpb-estime-a-436-milliards-de-dollars-le-cout-du-soutien-accorde-par-le-gouvernement-pour-la-fabrication-de-batteries-de-ve"}},"pivot":{"publication_id":772,"news_release_id":58}}